Schlumberger to Take $1 bln Restructuring Charge in Fourth Quarter
Schlumberger Ltd, the world's No.1 oilfield services provider, said it would take a $1 billion charge related to jobs cuts and the writedown of some seismic vessels as it trims its operations in response to slumping oil prices.
The company expects a pretax charge of $200 million in the fourth quarter ending December related to the job cuts, it said at Cowen and Company's energy conference on Tuesday. (http://bit.ly/1FMX63J)
Schlumberger on Tuesday had also said the quarter's results would also include a $800 million charge to write down the value of six vessels and other WesternGeco assets.
The company did not say how many or in which of its businesses it would cut jobs.
"We believe this downsize is indicative of expectations for lower exploration activity in the upcoming two years," Raymond James analyst Kevin Smith said in a note.
Oil and gas producers, Schlumberger's customers, have scaled back spending plans due to a 40 percent fall in oil prices over the past six months.
At least 6 brokerages, including Cowen and Credit Suisse, cut their price targets on the stock by 14 percent to $105 on an average.
Schlumberger shares were up 1.3 percent at $86.36 in midday trading on Wednesday on the New York Stock Exchange.
Reporting by Sayantani Ghosh in Bengaluru